Barbara Bako, Abuja.
The Managing Director, Bank of Industry Olukayode Pitan has said the bank is to give loan of N250bn to enterprises with focus on local content.
Pitan who spoke on the sidelines of the 25th African Export-Import Bank (AFREXIM) Annual Meeting in Abuja said the pricing which was lower than the commercial bank rate is to support industries.
16 international banks are part of the facility from Afreximbank of which four Nigerian banks based in the UK were part of it. He said BOI has done it’s own study and discovered that there is a gap in the funding of industrial sector to the tune of N704bn As a way to reducing that gap, he said “The $750m dollars facility is the largest that has been done for any Nigerian financial institution by Afreximbank it was a syndicate of banks.
“The money is medium term, which is three years and the interest is Libor plus six percent which is very good when you look at the rate Nigeria usually borrows. According to Pitan, the loan would allow the bank to release additional fund into the industrial sector.
He said “What this loan allows us to do is, it gives additional N250bn depending on the exchange rate that is used, between N230bn to N250bn to deploy to the industrial sector. “We are looking at small, medium and large enterprises. We are looking at enterprises or companies that have a focus in using local raw materials, companies that generate employment and bring down their cost of borrowing.
” On the foreign currency rate risk, he said all of this money have been guaranteed fully by the Central Bank of Nigeria. He explained that rate will be deployed at less than 10 percent interest per annum. “We are looking at the creative industry, light manufacturing, mining, gender business etc to promote Nigerian industrial sector,” he added.
As regards the loan repayment period, the managing director said the facility would be given to Nigerian businesses for a longer period of between seven and eight years “If we went for six years tenure, the pricing will be more expensive but the plan is that by the time we do two years of this, we will refinance it.
“What we are working with the CBN is that the loan we will given to Nigerian businesses, it will be a longer term loan of between 7-8 years for the industrial sector. “This is just for us to go into the market and raise money,” he conclude.
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